The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
- Former Steinhoff CEO Markus Jooste, who has been accused of fraudulently inflating the company’s profit numbers over the past decade, is refusing to repay Steinhoff the R850m in salary and bonuses he received since 2009. In the wake of an 18-month forensic audit by PwC, Steinhoff issued summons against Jooste to repay his earnings because they were dependent on what it calls “the sound and successful financial performance” of the retailer. Bloomberg reports that in a response filed in the Cape High Court, Jooste describes the claim as “vague and embarrassing” and argues the grounds forwarded by his former employer were not “express terms” of his employment contract. Jooste argues Steinhoff did not explain how any fictitious deals or accounting irregularities resulted in losses for the company, rather than just for shareholders. He also wants access to PWC’s full forensic report, which Steinhoff has refused to release on the grounds that it needs to keep this confidential to fight a multitude of legal cases.
- Pro-democracy demonstrators in Hong Kong yesterday held one of their biggest rallies as activism stretched into its 11th week. Organisers said 1.7m mostly black clad protestors attended a rally in Victoria Park, with many of them clogging traffic arteries by marching almost 4km to Hong Kong’s financial district, defying a police order to remain within the park. Sunday’s rally mirrored the two similarly massive events in June protesting against a proposed extradition bill which would have allowed people in Hong Kong to be sent to China for trial. After those protests, the city’s Beijing-appointed leader Carrie Lam suspended the controversial bill, but she has refused to shelve it completely. Beijing has taken a tougher line in recent weeks, demanding that Hong Kong police crack down hard and insisting those involved in violence be severely punished. Last week protestors closed down the Hong Kong international airport, leading to the cancellation of hundreds of flights. There were violent melees between some demonstrators and the police, which used teargas and rubber bullets. The protests have widened into a broader movement calling for democratic reform.
- The share price of South Africa’s oil-from-coal multinational Sasol dropped R43 to R235 a share shortly after the opening of trading on Friday, a loss of 16%. But the stock recovered throughout the day, closing 5% lower as investors digested still more bad news on the cost of Sasol’s Lake Charles chemicals plant in Louisiana. The project’s total cost has ballooned by 50% from original estimates, and is now expected to come in at a chunky $13bn. Weather delays and construction setbacks are being blamed for the overruns. Friday’s share price slump comes on the back of the delaying of 2019’s annual financial results scheduled for release today, but now pushed out to September 19. The board of directors said the delay was a result of the need to wait for the completion of an independent review and external audit on the Lake Charles project. The company previously warned shareholders that profit for the year to end June would be between 4% and 14% lower than the previous 12 months.
- South African banks say they are likely to raise the cost of credit for low income earners after the new National Credit Amendment Bill was signed into law last week. Bloomberg quotes Banking Association MD Cas Coovadia as warning of serious economic implications from the bill, which sets the groundwork for the suspension or forgiveness of the debts owed by over-stretched lenders. Business Day reported on Friday that South Africa’s National Treasury estimates debt-relief proposals could result in banks writing off between R13bn and R20bn. The bill provides for the extinguishing of debt for borrowers who earn a gross monthly income of under R7,500, have unsecured debt of R50,000 or more, and who have found to be critically indebted by the National Credit Regulator. In the past month, the share price of low-end lender Capitec has fallen 12.6%, with R29 of that R159 a share decline coming on Friday.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.